Bitcoin's Thursday Flash Crash Wiped Out $500 Million: What's Driving The Volatility?

Bitcoin‘s BTC/USD volatile trading around the $100,000 mark has sparked heated debate about what it driving the increased volatility.

What Happened: On Thursday, Bitcoin reached $103,000 before experiencing a sharp flash crash to $92,000, driven by aggressive profit-taking and cascading liquidations in an overheated derivatives market.

According to Coinbureau co-founder Nic Puckrin, realized profits hit their highest levels since November 2021, echoing a past scenario that triggered a significant correction.

The crash wiped out $500 million in liquidations within 24 hours but found support in the $92,000–$94,000 liquidity zone. BTC has since rebounded, though further profit-taking could lead to short-term volatility.

Also Read: Bitcoin Is ‘Global Capital’, Says Michael Saylor: ‘Every Nation That Respects Property Rights Is Going To Support BTC’

Why It Matters: Breaking the $100,000 threshold is a significant milestone, but flash crashes following new highs are not uncommon in Bitcoin’s history.

During the 2017 bull run, similar pullbacks preceded new record highs. This pattern suggests that resistance at $100,000 may weaken during subsequent attempts to breach it.

Puckrin reflected on the market dynamics, asking traders: "How are you positioning in this market?"

Crypto chart analyst Ali Martinez highlighted $96,870 as the most critical support level, citing that 1.45 million addresses purchased 1.42 million BTC at this price point. Martinez asserts that holding this demand zone increases the likelihood of Bitcoin continuing its upward trajectory.

The most significant support level for #Bitcoin is $96,870, where 1.45 million addresses bought 1.42 million $BTC. As long as this demand zone holds, there is a good probability that #BTC will continue marching higher. pic.twitter.com/O3F1FVjw33

— Ali (@ali_charts) December 6, 2024

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